38 PROCTOR | June 2016
‘Care and conduct’
costs component considered
Turner v Macrossan & Amiet Pty Ltd [2016] QCAT 5
Application to set aside costs
agreement – entitlement under
costs agreement to general care
and conduct component at rate
up to 50% – whether QCAT has
jurisdiction to make declaration
as to validity of costs agreement
– whether costs agreement
sufficiently certain – whether costs
agreement unfair or unreasonable –
onus of proof
In Turner v Macrossan & Amiet Pty Ltd
[2016] QCAT 5 the Queensland Civil and
Administrative Tribunal, constituted by
Carmody J, considered an application to
set aside a costs agreement which entitled
the law firm to charge a general care and
conduct rate of “up to 50%”. It was argued
that this costs agreement was unfair or
unreasonable, or insufficiently certain.
Facts
The applicant engaged the respondent
incorporated law firm to represent him in
relation to two matters. The respondent
rendered various invoices for legal services
relating to each matter. The amounts invoiced
were based on a costs agreement entered
into between the parties on 27 September
2011. A clause in the costs agreement
provided that:
“In addition to the item charges the
firm is entitled to charge a general care
and conduct component at the rate
up to 50% based on the total itemised
professional costs taking into account
the following matters...”
The clause then itemised 10 circumstances
which could determine the rate of the general
care and conduct charge to be imposed.
The applicant applied to the tribunal to set
aside the costs agreement on the grounds
that it was unfair or unreasonable, or that
it was insufficiently certain.
The application was determined on the
papers under s32 of the Queensland Civil
and Administrative Tribunal Act 2009 (Qld)
(the QCAT Act).
Legislation
The original jurisdiction of the tribunal
conferred by sections 9 and 10 of the QCAT
Act includes jurisdiction to deal with any
matter in respect of which jurisdiction is
conferred on the tribunal under an “enabling
Act”. An enabling Act is defined in s6(2) of
the QCAT Act so as to include an Act that
confers original, review or appeal jurisdiction
on the tribunal. Section 6 of the QCAT Act
also regulates the relationship between the
QCAT Act and enabling Acts generally.
Section 60(1) of the QCAT Act empowers the
tribunal to make a declaration about a matter
in a proceeding instead of making an order it
could make about the matter, or in addition
to an order it could make about the matter.
The tribunal’s power to set aside costs
agreements is conferred by s328 of the
Legal Profession Act 2007 (Qld) (LPA).
That section provides, in key respects:
On application by a client, the Supreme Court
or the tribunal may order that a costs agreement
be set aside if satisfied the agreement is not fair
or reasonable (s328(1)), and the Supreme Court
or tribunal may decide whether or not a costs
agreement exists (s328(8)).
Jurisdiction
By way of preliminary objection the respondent
argued that the tribunal lacked the jurisdiction
to declare the costs agreement invalid
for uncertainty.
The tribunal considered the provisions of
the QCAT Act conferring the tribunal with
jurisdiction, including the power under s60 of
that Act to make a declaration. It found nothing
to suggest that this power was unavailable to
the tribunal in determining the validity of legal
costs agreements under s328 of the LPA.
The tribunal also found that the jurisdiction
conferred under s328(8) could not be
construed as a mere reiteration of the
jurisdiction conferred in s328(1). It said
that a costs agreement under the LPA is
a standard contract or agreement that is
subject to special regulation and formalities
under the LPA, and that if the tribunal has
jurisdiction to consider the existence of
a contract it must possess jurisdiction to
examine the necessary preconditions for the
formation of a contract. Accordingly, it must
have jurisdiction to determine whether a
contract is void for lacking sufficient certainty.
It was concluded that there was no
jurisdictional impediment to issuing a
declaration of validity in respect of the
legal costs agreement; nor to the setting
aside of the costs agreement for uncertainty.
Existence of costs agreement
Onus of proof
As sufficient certainty of the essential
terms of a contract is an integral element
of a contract, including a costs agreement,
the tribunal found it to follow that the
onus resides with the party asserting the
existence of the contract. It noted that the
applicant appeared to be alleging uncertainty,
but explained this as merely putting the
respondent to proof regarding the existence
of the costs agreement.
Certainty of terms
The applicant submitted that the
consideration payable in exchange
for professional legal services in a costs
agreement was an essential term of the
contract, and that here the description
of general care and conduct charge made
the contract void for uncertainty. It was
submitted in particular that the rate of
general care and conduct was uncertain
because the costs agreement stated that
the charge was “up to 50%”, and also
that it was unclear whether the general
care and conduct charge applied to the
professional fee component of the costs
schedule, or all itemised professional costs.
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